MARVEL TO ACQUIRE FLEER FOR $28 PER SHARE;
MARVEL AND FLEER ANNOUNCE SECOND QUARTER RESULTS
NEW YORK, July 24 /PRNewswire/ -- Marvel Entertainment Group, Inc. (NYSE: MRV) and Fleer Corp. (NASDAQ: FLER), a major marketer of sports trading cards, announced today that they have entered into a definitive agreement by which Marvel will acquire Fleer for $28 per share in cash, or a total of approximately $265 million.
The transaction has been unanimously approved by the boards of directors of both companies. Under the agreement, a subsidiary of Marvel will begin a tender offer promptly for all of Fleer's shares at $28 per share. The offer is subject to, among other things, the tender of a majority of Fleer's outstanding shares.
The offer is to be followed by a merger in which each remaining share will be converted into the right to receive the cash price per share paid in the offer.
William Bevins Jr., Marvel's chief executive officer, said: "Marvel has had a growing involvement in the entertainment trading card business since 1990 with the introduction of Marvel Universe trading cards. The acquisition of Fleer enables us to rapidly increase our presence in the $1.2 billion market for sports and entertainment cards.
"It is our belief that the trading card business in the 1990s will be increasingly driven by innovative marketing and distribution plans, developed to maximize hobby and entertainment values. We also believe the overlapping consumer demographics and distribution systems of the two companies uniquely position us to become a clear industry leader within the card marketplace."
Paul Mullan, chairman and chief executive officer of Fleer, said: "In addition to our commitment to sports cards and confectionery products, our affiliation with Marvel will strengthen Fleer by association with one of the world's great libraries of entertainment characters. It will create exciting new product and cross-promotional marketing opportunities, enhancing our growth prospects in both trading cards and comic books."
In connection with the merger agreement, Fleer has agreed to pay Marvel a $6.5 million "break-up" fee under certain circumstances. In addition, Fleer granted Marvel an option to purchase 2,359,000 authorized but unissued shares of Fleer (representing approximately 25 percent of the currently outstanding shares) at $28 per share, exercisable under certain circumstances.
The offer will be made only pursuant to definitive offering documents, which will be filed with the Securities and Exchange Commission and mailed to Fleer stockholders promptly.
Merrill Lynch & Co. is acting as financial advisor to Marvel and will act as dealer manager in connection with the tender offer. The Blackstone Group L.P. is acting as financial advisor to Fleer. Chemical Bank will arrange the financing for the transaction.
Fleer Corp., based in Mt. Laurel, N.J., with operations in North America and Europe, is a leading marketer of sports picture cards (baseball, football and basketball) and confectionery products, including Dubble Bubble gum products.
Marvel Announces 192 Percent Gain In Second Quarter Income
Marvel today also announced that for the quarter ended June 30, 1992, net income increased 192 percent to $7.2 million or $0.30 per share compared to $2.5 million or $0.11 per share in the prior year period. Net revenues for the quarter increased 63 percent to $37.5 million compared to $23.0 million in the prior year period.
Terry Stewart, Marvel president, said net publishing revenues increased 77 percent to $33.2 million. This was due primarily to a 49 percent increase in unit volume and an increase in cover price on selected titles.
For the six months ended June 30, 1992, the company reported that net income increased 203 percent to $12.2 million or $0.50 per share compared to $4.0 million or $0.17 per share for the comparable period in 1991. Net revenues increased 62 percent to $68.3 million compared to $42.0.
Stewart concluded that based on current trends, the company is confident it will meet its goals for the remainder of 1992, setting the stage for future growth next year.
Marvel Entertainment Group, Inc., based in New York, is the largest creator of comic books and other illustrated action and adventure material in North America. Marvel publishes 90-100 titles a month and sells more than 180 million units a year. Marvel characters are world renowned, with comics translated in 20 languages and sold in some 30 countries. The company also derives significant income from advertising in its publications, and from licensing and merchandising Marvel character-related products such as trading cards.
MARVEL ENTERTAINMENT GROUP, INC.
Condensed Statements of Income
(In thousands, except per share data, unaudited)
Three Months Ended Six Months Ended
June 30 June 30
1992 1991 1992 1991
Net revenues $37,497 $22,981 $68,283 $42,038
Cost of sales 17,006 11,680 31,199 21,764
Gross profit 20,491 11,301 37,084 20,274
Selling, general &
administrative expenses 7,156 4,983 14,227 9,183
Interest expense, net 186 1,137 405 2,514
Amortization of intangibles
and other 504 542 1,008 1,083
Income before provision
for income taxes 12,645 4,639 21,444 7,494
Provision for
income taxes 5,412 2,159 9,241 3,464
Net income $7,233 $2,480 $12,203 $4,030
Earnings per share $0.30 $0.11 $0.50 $0.17
Weighted average number
of common and common
equivalent shares
outstanding(A) 24,554 24,000 24,549 24,000
(A) -- Assumes 24 million shares outstanding during each of the periods prior to Marvel's issuance of shares in connection with the initial public offering in July, 1991 as adjusted for the two-for-one stock split in March, 1992.
FLEER ANNOUNCES SECOND QUARTER RESULTS
Sales for the second quarter increased 20.6 percent to $48,431,000 from $40,173,000 for the same period a year ago. Gross profit for the quarter increased 20.1 percent to $21,221,000 from $17,663,000 in the second quarter of 1991. Selling, general and administrative expenses in the second quarter increased to $8,628,000 from $4,565,000 in the same period of 1991 reflecting planned increases in marketing expenses. Net income increased to $8,020,000 from $7,778,000 for the second quarter in 1991.
Earnings per share were $0.85 on 9,455,114 weighted average shares outstanding versus $0.82 per share on 9,456,103 weighted average shares outstanding for the same period in 1991. Cash, cash equivalents and marketable securities were $25,401,000 at June 30, 1992.
Sales for the first six months of 1992 increased 10.2 percent to $102,970,000 from $93,449,000 for the same period last year. Net income for the first half increased to $16,497,000 or $1.74 per share on 9,455,608 weighted average shares outstanding compared to $16,084,000 or $1.70 per share on 9,456,103 weighted average shares outstanding a year ago.
Paul H. Mullan, Chairman and Chief Executive Officer, said: "We are pleased with our first half results for 1992. Our performance reflects the continued acceptance of our new price/quality strategies, and, in particular, the success of our premium Ultra baseball cards. Our confectionery business remains strong, due in part to the successful introduction of our 'Goose Bumps' sour ball gum."
(financials follow)
FLEER CORP. AND SUBSIDIARIES
Financial Highlights
(Unaudited)
(In thousands, except per share data)
Three Months Ended Six Months Ended
June 30 June 30
1992 1991 1992 1991
Net sales $48,431 $40,173 $102,970 $93,449
Income before taxes 13,271 13,687 27,128 28,055
Taxes on income 5,251 5,909 10,631 11,971
Net income $8,020 $7,778 $16,497 $16,084
Earnings per share $0.85 $0.82 $1.74 $1.70
Weighted average shares
outstanding 9,455 9,456 9,456 9,456
Balance Sheet Highlights
June 30, 1992 December 31, 1991(A)
Cash, cash equivalents
and marketable
securities $25,401 $21,388
Working capital 45,613 31,445
Total assets 130,376 108,294
Total debt 405 439
Total shareholders equity 97,334 83,445
(A) -- Audited
-0- 7/24/92
/CONTACT: Pam Rutt of Marvel Entertainment Group, 212-576-8535, or Gary Fishman of The Hudson Stone Group, 212-983-8550, for Marvel Entertainment, or Matthew J. Harrington of Edelman Financial Relations, 212-704-8103, for Fleer/
(MRV) CO: Marvel Entertainment Group, Inc. ST: New York IN: ENT SU: ERN

TS-TM -- NY005 -- 3037 07/24/92 12:43 EDT

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